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Note 11, Income Taxes
9 Months Ended
Jun. 30, 2017
Income Tax Disclosure [Abstract]  
Income Tax Disclosure [Text Block]
In calculating the provision for income taxes, Adient uses an estimate of the annual effective tax rate based upon the facts and circumstances known at each interim period. On a quarterly basis, the actual effective tax rate is adjusted, as appropriate, based on changes in facts and circumstances, if any, as compared to those forecasted at the beginning of the fiscal year and each interim period thereafter. For the three and nine months ended June 30, 2017, Adient’s effective tax rate was 14.7% and 14.5%, respectively. The effective rates were higher than the statutory rate of 12.5% primarily due to foreign tax rate differentials and a first quarter fiscal 2017 tax law change in Hungary, partially offset by benefits from global tax planning. For the three and nine months ended June 30, 2016, Adient’s effective tax rate was 95% and 238%, respectively. The effective rates were higher than the statutory rate primarily due to Adient's change in assertion over permanently reinvested earnings as a result of the separation ($778 million), the jurisdictional mix of restructuring and impairment costs, the tax impacts of separation costs, and a non-recurring non-cash tax charge in the third quarter of fiscal 2016 related to changes in entity tax status associated with the separation ($85 million), partially offset by the benefits of global tax planning.

Uncertain Tax Positions

Prior to separation, Adient and JCI entered into a tax matters agreement that governs the parties respective rights and obligations with respect to certain tax attributes, including uncertain tax positions. As a result of the final tax matters agreement, Adient's unrecognized tax benefits decreased $477 million from September 30, 2016. At June 30, 2017, Adient had gross tax effected unrecognized tax benefits of $126 million, essentially all of which, if recognized, would impact the effective tax rate. Total net accrued interest at June 30, 2017 was approximately $12 million (net of tax benefit). The interest and penalties accrued during the three and nine months ended June 30, 2017 and 2016 was not material. Adient recognizes interest and penalties related to unrecognized tax benefits as a component of income tax expense.

Impacts of Tax Legislation and Change in Statutory Tax Rates

In December 2016, Hungary passed the 2017 tax bill which reduced the corporate income tax rate to a flat 9% rate. As a result of the law change, Adient recorded income tax expense of $5 million related to the write down of deferred tax assets.

Other tax legislation was adopted during the quarter in various jurisdictions, which did not have a material impact on Adient’s consolidated financial statements.

Other Tax Matters

In the three months ended March 31, 2016, Adient recorded $169 million of restructuring and impairment costs. Refer to Note 10, "Significant Restructuring and Impairment Costs," of the notes to the consolidated financial statements for additional information. The restructuring and impairment costs generated a $5 million tax benefit, which was negatively impacted by the geographic mix, Adient's current tax position in these jurisdictions and the underlying tax basis in the impaired assets.

In the three months ended March 31, 2016, Adient provided income tax expense on the foreign undistributed earnings of certain non-U.S. subsidiaries associated with the separation, which resulted in a non-cash tax charge and deferred tax liability of $778 million. As a result of the separation, Adient and JCI were no longer able to assert permanent reinvestment of foreign undistributed earnings as of March 31, 2016 which resulted in this non-cash tax charge.

In the three months ended June 30, 2016, Adient recorded a non-recurring non-cash tax charge of $85 million related to changes in entity tax status associated with the separation.

In the three months ended June 30, 2016, Adient recorded $75 million of restructuring and impairment costs. Refer to Note 10, “Significant Restructuring and Impairment Costs,” of the notes to the consolidated financial statements for additional information. The restructuring and impairment costs generated a $12 million tax benefit, which was negatively impacted by the geographic mix and Adient’s current tax position in these jurisdictions.